West Palm Beach, Fla. – It has been a busy few months for NAI/Merin Hunter Codman. Since June of this year, Palm Beach County’s largest privately held commercial real estate services firm has represented buyers and sellers in approximately $250 million of commercial real estate sales. The investment properties included office, retail and multifamily properties and ranged in size from just under one million to over seventy million dollars.
NAI/Merin Hunter Codman’s Investment Sales Team led by Chairman Neil E. Merin, SIOR, CCIM, Capital Markets Specialist Christian J. Johannsen, CCIM, Retail Specialist Spencer Grossman and Multi-Housing Specialist Wendy Pierre, CCIM, facilitated almost a quarter billion dollars of investment sales transactions representing a variety of institutional and private equity clients. NAI/Merin Hunter Codman accomplished its clients’ goals over what is normally a sluggish summer period in a year which has been notable for a nationwide slowdown in investor demand. In several cases NAI/Merin Hunter Codman’s Capital Markets team was also able to assist its clients by arranging financing for the properties. The firm which also manages and leases approximately 5 million square feet of office, retail and industrial property throughout Palm Beach County has established itself as one of Palm Beach County’s premier investment sales brokers.
Jordan Paul, Chief Executive Officer of NAI/Merin Hunter Codman stated, “Florida, in general, and Palm Beach County, in particular, have continued to be very attractive investment targets in a year where we have seen investors pull back due to economic and political uncertainty. Notwithstanding that perception, our area has benefitted from steady growth in rental rates and absorption along with positive demographic trends that should allow that growth to continue. We are very pleased that our team has been able to effectively convey all that is positive about Florida and Palm Beach County on behalf of our clients. We have a diverse and experienced group of brokers who have done a tremendous job this year representing our clients on a wide variety of investment sales. Our team has combined our market knowledge with the access we have to investors worldwide through our affiliation with the NAI Global network, which has over 375 commercial real estate offices located throughout the world, to provide our clients with an extraordinary level of exposure and outstanding transaction executions for their commercial properties.”
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Please enjoy an excerpt from the Fall issue of The Linneman Letter by Dr. Peter Linneman, PhD, Chief Economist for NAI Global and Principal of Linneman Associates. Mr. Linneman will also be the featured speaker of the upcoming 2017 NAI Florida Forum.
“How “at risk” are different property investments to an economic downturn? To address this question, we examined a variety of simplified investment profiles. Specifically, we simulated the returns for an 8-year hold period for 3 hypothetical multifamily investments: a class A property with a low yield and high NOI growth in a Gateway market (“Gateway A”); a class A property with a mid-range yield and medium NOI growth in a secondary market (“Secondary A”); and a class B property with a high yield, but low NOI growth, in a tertiary market (“Tertiary B”). We chose to model multifamily because of the simplicity of mark-to-market rents, though our insights can be generally applied to other property types. Each investment is analyzed for a Base Case with constant (but different for each property) NOI growth. For all investments, we assume a purchase price of $100 million, cash flow margins of 83% of NOI (reflecting on-going capex), and exit transaction fees of 3%.
The Gateway market A investment has a going-in cap rate of 4%, NOI growth of 4% per annum for 8 years, and an exit cap rate of 4.5%. The Secondary market A investment has a going-in cap rate of 6%, NOI growth of 2.5% per annum, and an exit cap rate of 6.5%. The Tertiary market B investment has a going-in cap rate of 7.5%, NOI growth of just 1.5% per annum, and an exit cap rate of 8%. For each property, we overlay 3 leverage scenarios: no leverage, 50% LTV, and 75% LTV. This yields a total of 9 “Base Case” scenarios. In both the 50% and 75% LTV scenarios, we assume 10-year debt with a 3.5% interest rate and 30-year amortization.
We also simulated how returns and (interest and debt) coverage ratios are affected by reduced NOI growth due to a cyclical downturn. We refer to these 9 scenarios as the “Realistic” scenarios, as NOI never grows smoothly upward forever. These scenarios assume -6% NOI growth in years 3 and 4 (that is, an aggregate 11.6% NOI decline spread over 2019 and 2020) of the investment horizon. Thereafter, the originally modeled growth rates resume through year 8. In total, we simulated 18 investment scenarios and their corresponding return profiles: 3 different investments, with 3 leverage ratios and 2 economic environments.
While highly simplified, this analysis is fairly realistic and provides insights on the impacts of leverage, property type, and the economy. As to leverage, as long as original pro-forma growth occurs, increased leverage increases both the equity IRR and the equity multiple. For example, the Gateway A property generates an equity IRR of 5.2% with no leverage, 6.3% with 50% leverage, and 8.5% with 75% leverage, while the equity multiple increases from 1.4x to 1.6x to 2.0x over the 8 year hold.”
CLICK HERE to read the full excerpt.
PRESS RELEASE: Christian J. Johannsen, CCIM of NAI/Merin Hunter Codman Completed $38,650,000 of 1031 Exchange Investment Sales and Secured $25,825,000 of Financing
West Palm Beach, Fla. – NAI/Merin Hunter Codman, Inc., Palm Beach County’s leading commercial real estate services firm, is proud to announce that Christian J. Johannsen, CCIM, Managing Director of NAI/Merin Hunter Codman has executed three acquisitions to complete the outbound leg of an IRS Section 1031 Exchange totaling $38,650,000. Mr. Johannsen also placed $25,825,000 financing for the three sale transactions. All three acquisitions were NNN (Triple Net) leased to creditworthy tenants.
Christian J. Johannsen, CCIM is a commercial real estate veteran who specializes in capital advisory services at NAI/Merin Hunter Codman. Utilizing his expertise, he was able to defer his client’s immediate tax liability by taking advantage of a provision in the tax code (Section 1031) that permits property owners to exchange like properties, under certain criteria, to defer recognition of gain or loss and therefore defer the tax that may have occurred in an outright sale.
Representing Garner Advance, LLC, Mr. Johannsen advised his client on the purchase of White Oak Crossing, an 87,446 square foot retail plaza containing signature national tenants Burlington Coat Factory, Staples and Dollar Tree. White Oak Crossing is located at 1210-1230 Timber Creek Drive in Garner, NC and was purchased for $12,300,000 from NC Garner White Oak, LLC. Mr. Johannsen also secured a 10-year, non-recourse loan in the amount of $7,380,000 at an interest rate of 2.64% on behalf of the purchaser. The seller NC Garner White Oak, LLC was represented by J. Tyson Glasser, CCIM, of Realty Link, Greenville, SC.
In Florida, Mr. Johannsen represented Celebration Advance, LLC in the purchase of Celebration Office Center III, a 100,924 square foot, 3-story office building located at 1390 Celebration Boulevard, Kissimmee FL for $17,200,000. Mr. Johannsen also secured a $12,040,000, 10-year loan at 2.64% interest on behalf of his client, Garner Advance, LLC.
On the Treasure Coast of Florida, Mr. Johannsen identified a 51,627 square foot office / call center located at 300 Business Center Drive, Port St. Lucie, FL as an investment for his client PSL Advance LLC. Mr. Johannsen’s client purchased the property from QVC St. Lucie for $9,150,000. In order to complete the acquisition, Mr. Johannsen secured the $6,405,000 financing in a 10-year, 2.64% non-recourse loan.
Jordan Paul, CEO of NAI/Merin Hunter Codman said, “Christian J. Johannsen, CCIM personifies the signature brokerage service and customer service for which NAI/Merin Hunter Codman is known. Utilizing the NAI Global platform Mr. Johannsen was able to select 1031 Exchange properties in and outside of the state to fit each of his client’s unique needs. Mr. Johannsen, did not stop there, he also asked, “How can I help you next?”, and secured the financing needed to finalize the deals”. Continuing Mr. Paul stated, “Congratulations to “CJ” for a job well done.”
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In a resounding repudiation of the political class, on June 23, 2016, the citizens of the U.K. overwhelmingly voted to leave the European Union by a margin of 52% (17.4 million voters) to 48% (16.1 million). The “British exit”, commonly known as “Brexit”, was opposed by all 5 U.K. political parties, as well as President Obama, Chancellor Merkel, and almost every political leader around the globe. The vote was framed as a choice between maintaining economic and political stability (the “stay” camp) versus national sovereignty (the “leave” camp).
CLICK HERE to read the rest of The Linneman Letter.
West Palm Beach, Fla. – Jordan Paul, CEO of NAI/Merin Hunter Codman Inc., Palm Beach County’s leading commercial real estate services firm, is pleased to announce the completion of over 250,000 square feet of commercial real estate sales and leasing transactions in the first quarter of 2016.
“Our brokerage teams have hit the ground running in the first quarter of 2016, completing sales and leasing transactions on over 250,000 square feet of commercial real estate,” said Jordan Paul, CEO of NAI/Merin Hunter Codman. On the investment sales side, Bruce Corn, Managing Director, completed the sale of the 26,700 square foot Palm Beach Golf Center located at 7700 N. Military Trail, Riviera Beach. Jason L. Sundook, SIOR, Principal and Spencer Grossman, Director also completed the sale of 1425 Gateway Boulevard, a 28,000 square foot former charter school in Boynton Beach.
Tenant representation services were provided by David W. Knott and Ryan R. Dinsdale, CCIM of NAI/Merin Hunter Codman’s Investment Services Team, who facilitated a 30,000 square foot lease expansion for RAVE, LLC, a global supplier of advanced equipment for leading edge semiconductor and nanotechnology applications.
Lesley Sheinberg, a NAI/Merin Hunter Codman Director, who specializes in medical site facilitation, secured two facilities for ChenMed (Chen Neighborhood Medical Centers South Florida) totaling 25,000 square feet in Lakeland, Florida. ChenMed is a family-owned, family-oriented organization committed to bringing superior health care to moderate-to-low-income seniors.
Richard Brockney, Director of NAI/Merin Hunter Codman’s South Palm Beach County leasing team, facilitated a total of 21,000 square feet of new leases, including a 13,000 square foot lease with Shendell & Pollock, a local law firm, on behalf of Fountain Square Owner, LLC at Fountain Square in Boca Raton.
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NAI/Merin Hunter Codman, Inc. is pleased to bring to market 45th Street Plaza, a 128,362 SF retail shopping plaza that offers investors multiple ways to completely redevelop the asset. The plaza was constructed in 1985 with renovations in 1997 and rests on 9.68 acres in West Palm Beach, FL. Existing national and local tenants offer an in place income while implementing a value-add strategy. The adjacent 1.15 acres of land on South Tiffany Drive can be made available, and the property has the ability to create multiple out-parcels.
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It was such a pleasure to see our NAI Florida brothers and sisters at the Inaugural NAI Florida Forum and NAI Florida Chapter Meetings held November 5-6, 2014 at the gorgeous Mayfair Hotel & Spa in Miami, FL. First and foremost, NAI/Merin Hunter Codman must thank NAI Miami’s Jeremy Larkin, Jackie Larkin and Elizabeth Calderin for coordinating the outstanding two-day event. Kind words from clients, fellow NAI Florida attendees, sponsors and speakers resonated through the air in appreciation for their hard work and dedication in making all NAI Florida events educational and successful. We must also thank Kevin Fitzgerald of NAI Southwest Florida who welcomes and introduces with kindness, insight, flair and laughter. Last but not least… NAI/Merin Hunter Codman would like to thank our fellow event underwriters NAI Global, NAI Miami and NAI Rauch Weaver Norfleet Kurtz and Company.
This was Inaugural year for the NAI Florida Forum. Clients, brokers and outstanding speakers joined us from near and far giving state-wide market and economic updates. Key note speakers included Jay Olshonsky, President of NAI Global, Karen Gilmore, Vice President and Regional Executive of the Federal Reserve, and J. Antonio Villamil, The Washington Economics Group’s Founder and Principal. Presentations from Enterprise Florida, the Oxford Business Group, Greater Fort Lauderdale Chamber and The Beacon Council of Miami-Dade were also heard. We also offer words of appreciation to business partners of various NAI Florida member firms who proudly sponsored the NAI Florida Forum… Cherry Bekaert, LLP, CoStar Group, USI Insurance Services., Shutts & Bowen, LLP, Anderson-Moore Construction Corp., Atlantic Southern Paving and Sealcoating, Advanced Roofing, eBid Systems, GLE Architects, Engineers & Environmental Consultants. Last but certainly not least a round of applause goes to our NAI Forum event monitor and exclusive media sponsor South Florida Business and Wealth Magazine. More >
NAI Global released Dr. Peter Linneman’s most recent white paper. The topics included by this paper include:
- Is it the growth that fuels U.S. real estate development? Why?
- Why does the U.S. still have tremendous growth potential due to pent-up demand?
- Why do large cities tend to be attractive?
- What is the single most important factor in determining future population growth?
Please click here to view and download the white paper, “Where Will U.S. Population Growth Occur? A Glimpse at 2020 and 2030″.
West Palm Beach, Fla. – NAI/Merin Hunter Codman, Inc., one of South Florida’s leading commercial real estate services firm, today announced that it has arranged the sale of a prime, 10-acre parcel of land in Palm Beach Gardens, Florida, to Education Capital Solutions (ECS), which plans to build a public charter school on the site. ECS is a wholly owned subsidiary of the $3-billion specialty real estate investment trust, EPR Properties—formerly Entertainment Properties Trust. EPR (NYSE: EPR) has, as part of its core portfolio, a focus on the financing and development of public charter schools with investments nationwide. This latest Palm Beach Gardens charter school investment has particular significance for Florida communities; it is part of a growing “learning cluster” in the geographic area that includes nearby Florida Atlantic University — the campus site of Scripps Research and Max Planck Florida Institutes — as well as Palm Beach State College, the newly opened Mandel JCC early childhood learning center, and the college preparatory campuses of The Benjamin School in the area.
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±3.09 acres of vacant land suitable for office, hotel, industrial, research, manufacturing. Zoned PIPD – Planned Industrial Park Development. Walk to restaurants and hotel in the Park. Traffic count on Okeechobee Boulevard =52,768 vehicles per day.
Located in the 640 acre Vista Center Commercial Park off of Okeechobee Boulevard. Immediate access to Florida’s Turnpike.